Banknotes and Coins

Cash circulation increased by 8.1 per cent in 2005, which can be assumed to be a result of high growth in private consumption. The total cash circulation was kr. 55.5 billion at year-end.

In 2006, Danmarks Nationalbank will initiate the process to design a new Danish banknote series to replace the existing series from 1997. In 2005, Danmarks Nationalbank introduced a new, more secure 50-krone banknote and a new Faroese 1,000-krone banknote.

To mark the bicentenary of the birth of Hans Christian Andersen, Danmarks Nationalbank commenced the issue of a new series of coins with fairy tales as their common theme. In 2005, the first two coins in the series, with motifs from "The Ugly Duckling" and "The Little Mermaid", were issued.

Two new tower coins, with the motifs of Landet Church on the island of Tåsinge and Nólsoy Lighthouse in the Faroe Islands, were issued in 2005, and in February 2006 they were followed by a tower coin depicting Gråsten Palace Tower.

BANKNOTES AND COINS IN CIRCULATION

The value of banknotes and coins in circulation was kr. 55.5 billion at end-2005. This is an increase by 8.1 per cent from 2004.^[1] The large increase can be assumed to be a result of high growth in private consumption.

The number of 500-krone banknotes has increased substantially in recent years and now constitutes 16 per cent of total banknotes in circulation. The increase in the circulation of 500-krone banknotes may be a consequence of the increasing volume of banknotes circulated via ATMs. The circulation of 200-krone banknotes has also increased considerably in recent years, while the circulation of 100-krone banknotes is by and large unchanged compared to 2000, cf. Chart 26. However, 100-krone banknotes still constitute the largest share, 39 per cent, of total banknotes in circulation. The total circulation of banknotes rose by 8.4 per cent in 2005, to kr. 50.4 billion at year-end.

The circulation of coins increased by 5.6 per cent to kr. 5.2 billion at the end of 2005. Especially the circulation of 20-krone coins has increased.

Pursuant to the Danmarks Nationalbank Act of 1936 the circulation of banknotes must be covered by Danmarks Nationalbank's holdings of gold and other assets. Since September 1939 an exemption from the gold coverage provision has been granted. The circulation is covered by other assets.

UPGRADING OF BANKNOTES

A more secure 50-krone banknote with a hologram and fluorescent colours was issued in August 2005. This marked the conclusion of the upgrading of Danish banknotes which Danmarks Nationalbank commenced in 2002. All Danish banknotes have now been upgraded with a hologram and fluorescent colours. These security features make the banknotes more difficult to counterfeit, as well as making it easier to distinguish a genuine from a counterfeit banknote. The motifs on the banknotes are unchanged, and the old banknotes remain legal tender, but will be gradually withdrawn from circulation.

NEW BANKNOTE SERIES

In 2006, Danmarks Nationalbank will initiate the process to design a new Danish banknote series to replace the existing series from 1997. Danmarks Nationalbank will invite a number of artists to prepare design proposals for the new banknote series. The chosen design is expected to be announced in the late summer of 2006, and the first banknote in the new series is planned to be issued in 2009.

In current years a number of countries are introducing new and better security features on their banknotes. In order to keep up with technological advances and to make it ever more difficult to counterfeit banknotes, Danmarks Nationalbank has begun work on a new banknote series.

Further upgrading of the present banknote series would be at the expense of aesthetics, and multiple changes to the same banknote series can create uncertainty regarding the characteristics of an authentic banknote.

Consequently, major enhancements of banknote security are best communicated in conjunction with the issue of a new banknote series.

COUNTERFEIT BANKNOTES

In 2005, 442 counterfeit banknotes were found in circulation, cf. Chart 27. This is a considerable decrease compared to the preceding three years when more than 1,000 counterfeit banknotes were removed from circulation every year. The number of counterfeit banknotes in 2005 was at the lowest level since 1997. Part of the explanation may be that Danmarks Nationalbank has enhanced the security of the banknotes, so that a large proportion of the banknotes now in circulation have holograms and fluorescent colours. The new security features make it more difficult to counterfeit banknotes and easier to distinguish a genuine from a counterfeit banknote.

Only few attempts to copy the new security features have been detected. The 100-krone and 500-krone banknotes are still the banknotes most frequently counterfeited.

FAIRY TALE COINS

In 2005, Danmarks Nationalbank introduced a new series of thematic coins with motifs from Hans Christian Andersen's fairy tales, and the first two coins in the series of five were issued. The motifs for the first two coins, "The Ugly Duckling" and "The Little Mermaid" were designed by, respectively, the sculptors Hans Pauli Olsen and Tina Maria Nielsen. The fairy tale coins are presented in Box 6. The portrait of the Queen on the obverse of the coins is by the sculptor Professor Mogens Møller.

The fairy tale coins are issued as 10-krone coins in three different editions – a gold coin, a fine silver coin and an ordinary 10-krone coin. The gold and silver coins are issued to cater for the collector's market. The prices of these coins exceed their face value. All fairy tale coins are legal tender and can be exchanged at Danmarks Nationalbank at face value.

The gold coins with "The Ugly Duckling" and "The Little Mermaid" are issued in maximum editions of 7,000 and 6,000, the silver coins in maximum editions of 75,000 and 60,000, while the ordinary 10-krone coins are each issued in an edition of 1.2 million. The next fairy tale coin will be issued in the spring of 2006.

TOWER COINS

Danmarks Nationalbank issued two more 20-krone coins with Danish towers as the motif on the reverse in January and September 2005. The motif for the sixth coin in the series, designed by the sculptor Øivind Nygaard, is the tower of Landet Church on the island of Tåsinge. The seventh coin, depicting Nólsoy Lighthouse in the Faroe Islands, was designed by the Faroese sculptor Hans Pauli Olsen. The eighth coin in the tower series was issued in February 2006. Its motif of the tower of Gråsten Palace was designed by the sculptor and graphic artist Sys Hindsbo. The obverse of the tower coins shows a profile of the Queen. The tower coins are presented in Box 7. The three tower coins were each issued in an edition of 1.2 million.

2005 COIN SET

The Royal Mint's 2005 Coin Set was again issued in two editions, an ordinary edition and a proof edition. The coins in the ordinary coin set are minted with two strokes, which is one more than the ordinary coins in circulation. The coins in the proof edition are minted with three strokes. The medal in the 2005 Coin Set is a copy of the medal awarded to Olfert Fischer and his men after the Battle of Copenhagen in 1801, in which they defended Copenhagen against the British navy. The ordinary and proof editions are issued in maximum 31,000 and 3,500 sets, respectively.

In February 2006, The Royal Mint for the first time issued a coin set especially for children. The children's coin set includes the year's coins minted with two strokes and a silver medal. The medal has space for engraving a child's name. The motif for the medal is by the illustrator Cato Thau-Jensen, who also designed the folder in which the coins are mounted, cf. Box 8.

FAROESE BANKNOTE SERIES

A new Faroese 1,000-krone banknote was issued in September 2005. This completes the Faroese banknotes series that was introduced in 2001. The primary motifs on the new Faroese banknotes are inspired by Faroese fauna, while the motifs on the reverse are reproductions of watercolours of Faroese landscapes.

The primary motif on the new 1,000-krone banknote is a purple sandpiper, and behind it a watercolour of a flock of birds is reproduced. The motif on the reverse is a watercolour of the view from the island of Sandoy.

The Faroese artist Zacharias Heinesen painted the watercolours for the banknote series, which is presented in Box 9.